What drives employee benefits

strategy in Australian

organisations?

- Study through survey of Australian HR managers

Executive Summary

1 100% of HR managers surveyed say that employee benefits

drive retention

Leave and flexibility are considered most important type of

employee benefits followed by financial benefits such as

salary packaging

Cost to the organisation is a key factor in deciding which

employee benefit to provide to their workforce

Understanding of salary packaging and novated leasing is

high among the HR managers surveyed

73% of organisations surveyed already have salary

packaging or novated leasing in place

2

3

4

5

6 78% of organisations that do not already have salary

packaging or novated leasing are considering to implement

in 2013!

DRIVERS OF EMPLOYEE BENEFITS

We asked what the main drivers of an employee benefits strategy were:

of HR managers surveyed either agree or strongly agree that employee benefits drive retention

What do you see are the main drivers of an

employee benefits program?

5%

5%

59%

36%

63%

35%

64%

32%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Attracting new staff

Retaining existing staff

Engaging Staff

Disagree Agree Strongly Agree

Types of Employee benefits ranked in order of

importance to HR managers surveyed

1 Leave and flexibility benefits

2 Financial

benefits such as salary packaging

3 Wellness

programs such as gym

memberships 4 Access to consumer

retail discounts 5

Leisure and lifestyle

memberships

Cost to the organisation is a top consideration

while deciding what benefits to give employees

1 Cost to the organisation

2 Potential participation of employees

3 Ease of implementation

4 Savings offered to employees

5 Compliance and risk

Awareness and understanding of salary packaging and novated

leasing is high among HR managers across Australia

7

I don't know anything about salary

packaging or novated leasing, 5%

Somewhat understand the benefits, 38%

I understand salary packaging and

novated leasing very well, 57%

0% 10% 20% 30% 40% 50% 60%

73% of HR managers surveyed have salary packaging or

novated leasing as an employee benefit in their organisation

already

8

0% 10% 20% 30% 40% 50% 60% 70% 80%

No

Yes

Does salary packaging or novated leasing form part of your organisation's employee benefits program?

78% of HR managers who do not offer salary packaging or

novated leasing are considering offering it in 2013

9

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

No

Yes

Would you consider exploring the option of including salary packaging and novated leasing as part of your organisation’s

employee benefits program in 2013?

Only 19% of organisations that do salary package do it internally

completely

10

Outsourced 44%

Internally 19%

Combination 37%

Do you outsource or do the benefits administration internally?

In the combination category, most do salary packaging internal and novated leasing outsourced

The main advantages of why organisations want to

salary package – particularly cars

Top advantages of providing salary packaging and novated leasing

Tax benefits and therefore more competitive salaries

Meets employee expectations and is consistent with competitor offering

Employees expect it nowadays

Cost neutral to the company. Employees get to purchase a vehicle they would not normally be

able to afford.

Provides freedom of choice and flexibility for employees and reduced vehicle costs to employers

More to offer to employees, leads to greater tie-in or retention

Tax benefits; ability to spread cost

Top challenges to providing salary packaging: HR

managers believe there’s not enough benefit for employees

18%

39% 43%

50%

68%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Employees aren't interested

It is expensive to implement and

administer

It is difficult to understand how

salary packaging/novated

leasing works

The process is complex to

implement and administer

There's not enough benefit for employees

One of the respondents’ comments was - “Planning, thought and variety overcome these challenges”.

71% of HR managers would consider a service that guarantees the

lowest price for new cars as an employee benefit outside of salary sacrifice

29%

71%

0% 10% 20% 30% 40% 50% 60% 70% 80%

No

Yes

Car buying service